Making Sense of Net Neutrality

Sept. 9, 2014
Today’s buzzword might spur tomorrow’s major impact on web-based hosted security service providers

Heated debates and legal activity over its breadth and impact has elevated awareness and discussion about “Net Neutrality,” which, as a whole is a murky subject among most of us. But the bottom line is this: security integrators and hosted security service providers should be in favor of net neutrality. The worry among the security industry is that the federal government will change the current net neutrality rules to appease large telcos and service providers like Netflix — which may indirectly have an impact on security dealers and integrators who choose to offer web-based hosted services.

Traditionally, net neutrality is based on the principle that all Internet traffic and its content — flowing to and from destinations — should be treated equally, and that Internet Service Providers (ISPs) should not pick and choose what to give preference to, or cut traffic off in favor of their own preferences; thus the term “neutrality.”

Why would providers want to block, slow, speed up or prefer one service over another? Commercial economics of course — like whipping down a privately funded toll-road during peak hours because you have a choice to do so. It seems to make sense, but consumers — and the security industry — are crying “not so fast.”  

The Open Internet

According to the Federal Communications Commission (FCC), one of the most important features of the Internet is its openness: It uses free, publicly available standards that anyone can access and build to, and it treats all traffic that flows across the network in roughly the same way. This design has made it possible for anyone to easily launch innovative applications and services, revolutionizing the way people communicate, participate, create and do business, such as email, blogs, streaming video and online shopping. The FCC is focused on ensuring that every American has access to open and robust high-speed Internet service (broadband).

The “Open Internet,” writes the FCC, is the Internet as we know it — a level playing field where consumers can make their own choices about what applications and services to use, and where consumers are free to decide what content they want to access, create, or share with others. Network, or “net” neutrality is just another way of referring to Open Internet principles.

Challenges to Net Neutrality

One of the terms for AT&T gaining approval to proceed with its acquisition of Bellsouth in 2006, was to maintain a neutral network. In contrast, Cox Communications and Comcast’s traffic management practices were challenged during 2008 due to their slowing of peer-to-peer BitTorrent traffic. The FCC ordered Comcast to create a new network management plan and to cease interference with BitTorrent traffic. Comcast subsequently appealed and argued that the FCC had no such hard rules governing traffic management.

In April 2010 the D.C. Court of Appeals overturned the FCC’s anti-throttling ruling, stating that the agency lacked any statutorily mandated responsibility to enforce net neutrality rules. Then, eight months later, after much discussion, the FCC approved net neutrality regulations with several compromises including lesser rules for mobile subscribers and exceptions for managed services.

In Jan. 2011, Verizon filed suit challenging the new FCC rules. Although the suit was thrown out because the rules were not yet published, it was re-filed in Sept. 2011.

In between, companies like AT&T have had their own fracas with Apple users, eventually dropping their insistence that users of Apple’s video conferencing application must purchase the most expensive data plan, after consumer and digital rights groups raised net neutrality concerns.

Net neutrality really became a buzzword when the lawsuit filed by Verizon was decided by a three-judge panel in Washington D.C., in Jan. 2014, which cited the FCC as having explicitly decided not to classify broadband traffic as a telecom service. Therefore by classifying the providers differently from common carriers, it could not, by extension be able to regulate them because it is expressly prohibited by the Communications Act. The court also said that two specific rules of the FCC’s “Open Internet Order” (no blocking and no unreasonable discrimination) exceeded its authority under current law. Importantly though, the D.C. Appeals Court did not declare the entire concept of net neutrality unlawful, not that the FCC could have a do-over.

The FCC’s Response

From the carrier’s perspective, content pulled from a remote site traveling across their network to the consumer requires appropriate infrastructure. That infrastructure costs money, usually in the form of large amounts of capital to build networks and peering points, and like any for-profit business, and they want to be compensated with a return on investment.

Can the FCC make rules about Web traffic discrimination because of the relationship between the free flow of information and the expansion of new technologies and services?

FCC’s strategy is apparently twofold. It is considering re-writing the net neutrality rules to rely on Section 706 of the Telecommunications Act, which gives the FCC authority to regulate broadband infrastructure deployment, which would enable the possibility that broadband providers can be “reclassified.” This would allow ISP regulation in a manner similar to phone companies.

Other core questions remain. Is it reasonable to allow the FCC to specify that consumers must take the “buffet” version of internet when some may prefer “a-la-carte” — and by extension, consumers may also be forced to pay for (a less than optimum) service when in fact all they wanted was a slice of pizza.

In the situation where a cost-effective and innovative home security video surveillance offering from a Telco might be offered — which uses only a handful of the 65,000+ ports which provide other services on the internet — is it net neutral? Maybe. It would seem the service is net neutral-complaint, because it is based on the exclusion for managed service providers in the current FCC rules.

Less than a month ago, in mid-May, the FCC launched a rulemaking announcement entitled “How Best to Protect and Promote the Open Internet.” The essence of the proposals are related to retaining the 2010 rule, “enhancing” the transparency rule, reviving the no blocking rule, tentatively concluding that exclusively offering a priority service should be considered illegal until proven otherwise, a revisit of commercial reasonableness, other detailed questions about which legal authority should be used (section 706 or title II) and reviewing a new dispute process.

The Immediate Impact

As of the January D.C. Appeals Court ruling, it is now legal for providers to slow or block net traffic. It also makes it possible for providers to reach private commercial arrangements.

One of the possibilities of the present discussion is to create “Fast Lanes” for content. The core idea is to allow providers like Netflix a more direct route and pathway to networks this allow for better performance of their content.

If you want to make content available for multiple users to stream or download, having a fast network to stash and deliver content is necessary, thus the need for “Content Delivery Networks” (CDNs). To connect a CDN through large ISP providers, having a direct peering point with lots of bandwidth becomes critical.

If and when the links between the content providers’ CDN and the consumer become congested, the quality of service is affected. Think of it like placing a single lane road to connect portions of an Interstate, and doing that at rush hour. You get the picture.

For Netflix customers, that means slow or grainy video, and poor definition, when high definition is the preferred mode. If skinny bandwidth impacts connections, and in turn the number of subscriptions and growth, company value will suffer. On the other hand, lots of available, directly peered bandwidth for fast performance should have the reverse effect. Now you get the business reason for the need for fast and consistent end-to-end bandwidth for content.

What Netflix has cleverly done, is to negotiate direct peering arrangements with ISPs under the expectation of a payment-free connection. Why would an ISP want to make their network even faster, at no charge to the content provider, and with an increase in cost? Following the D.C Appeals Court ruling, these connections can now be paid for by the consumer, and subsequently, Comcast and Verizon have both struck deals with Netflix.

Another aspect not yet being talked about much is the streaming delivery of Ultra High Definition TV. Put another way, “Ultra HDTV” or “4K” because of its 2160 x 3840 pixel resolution, is four times the current pixel count. Pushing eight megapixels through an internet connection as opposed to a mere two for HDTV requires a model to be in place for high-bandwidth delivery.

The Impact on Hosted Service Providers

What does this mean for business and consumers — will they be treated the same? And how might it affect security offerings? Are investors in commercial internet infrastructure going to be instructed to allow unfettered traffic movement on their networks?

That seems to be a clear and resounding “no.”

What happens in the case of video surveillance providers who want to use a competitive Software as a Service platform? Will they be subsidizing users on the net? Will insistent infrastructure rules hamper cable companies and Telcos from offering a curated service?

Nothing is decided yet in the interim, and the Telco and investor communities are not thrilled by the idea that Telcos should subsidize core infrastructure and have all traffic forced to pass for free with the same status. Especially for them, the idea that all internet traffic should be treated equally may in fact be harmful to business and restrict innovation.

The term net neutrality sounds appealing. The reality however, is seeing if a balanced solution can be found which provides an equitable way of passing large amounts of traffic as the Internet continues to grow. One way or another, in a few short months we can write the next chapter.  

Shayne Bates, CPP, is a trusted advisor to Fortune and Technology companies, providing expert advice about security technology aligned with business strategy. Board Certified in Security Management, Bates started his career specializing in telecommunications and security. Please visit his blog at Disclosure: As the holder of several stocks, the author owns publicly traded stock in Netflix and other media and tech companies.

About the Author

Shayne Bates

Shayne Bates, CPP, is a trusted advisor to Fortune and Technology companies, providing expert advice about security technology aligned with business strategy. Board Certified in Security Management, Bates started his career specializing in telecommunications and security. Visit his blog at ?